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Republicans to Seek Concessions From Obama on Debt Limit

Senate Minority Leader Mitch McConnell
Senate Minority Leader Mitch McConnell, a Republican from Kentucky, right, walks to the Senate floor at the U.S. Capitol in Washington, D.C. Photographer: Pete Marovich/Bloomberg

With a U.S. budget deal behind them, Republicans now plan to extract something from President Barack Obama in exchange for raising the nation’s debt ceiling.

They just haven’t decided what yet.

The budget agreement the Senate is poised to pass today sets higher spending levels for two years, without raising the debt limit. Democrats want to increase U.S. borrowing authority without conditions. Republicans reject that.

“Every time the president asks us to raise the debt ceiling is a good time to achieve something significant for the country,” Senate Minority Leader Mitch McConnell said yesterday. “The debt ceiling legislation is a time that brings us all together and gets the president’s attention.”

Congress suspended the debt limit through Feb. 7 as part of a deal to end a partial government shutdown in October. After that date, the government can use so-called extraordinary measures to prevent missed payments. Treasury Secretary Jacob J. Lew has said those steps can last for about a month.

Obama won’t “bargain on the full faith and credit of the United States,” Jason Furman, chairman of the Council of Economic Advisers, said today at a Washington event. “If you went up to the wire on the debt limit, certainly if you went beyond the wire on the debt limit, that would be a major threat to the economy.”

Further Cuts

Republicans want further spending cuts as the budget deficit’s share of the economy falls to its lowest level since November 2008. The deficit was 4 percent of the gross domestic product as of Sept. 30, down from a high of 10.1 percent in February 2010.

Republican leaders are considering several proposals to add any measure that would increase the debt limit, from a delay or repeal of the individual mandate in the health-care law to energy and tax-code changes. Republicans probably will set their plans after an annual policy retreat in late January.

The Senate is set to take a final vote today on the $1.01 trillion budget deal. Republican Senator John Cornyn of Texas predicted a vote about 4:30 p.m., a sign Republicans are delaying the vote as long as possible. Obama has said he’ll sign the measure into law.

House and Senate negotiators then must agree on, write and enact a spending bill to avert another government shutdown when U.S. funding authority expires Jan. 15.

Spending Bills

The process of writing the legislation has already begun. Senator Dick Durbin, chairman of the subcommittee on defense and the chamber’s second-ranking Democrat, is basing decisions on a three-page memo that he said covers the “substantive issues” to be resolved. He declined to share the list.

Senate Majority Leader Harry Reid told reporters that appropriators will work over the holiday break to translate the budget agreement into line-item spending decisions that would be part of a funding bill.

Republicans have leverage in the debt ceiling debate because they have the House majority and must provide at least five votes in the Senate to cut off debate on legislation.

“You can’t raise the debt limit without having a discussion on what’s driving our long-term debt,” Arizona Republican Senator Jeff Flake said in an interview.

The debt ceiling “can’t be played as a bargaining chip,” Durbin said. “If Republicans want to run the risk of shutting down the economy, not just the government but the economy over this issue, it’s a serious mistake.”

‘Not Negotiating’

He added: “We are not negotiating on the debt ceiling.”

Reid, a Nevada Democrat, told reporters yesterday that he didn’t think Republicans would seek to force another fight by attaching conditions to an increase in borrowing authority.

“I can’t imagine the Republicans want another fight,” Reid said. “We’ve passed two debt ceilings in the very recent past, and we should do another one.”

McConnell, a chief architect of a 2011 law raising the debt ceiling and the Oct. 16 deal to suspend the limit and end a 16-day government shutdown, said he was eager to see what conditions the Republican-controlled House wants.

“I can’t imagine it being done clean,” he said. “We’ll have to see what the House insists on adding to it as a condition for passing it.”

Republicans should at least demand changes to the health care law, such as delaying or repealing the mandate that individuals buy health care coverage and allowing insurance plans to be sold across state lines, Senator Ron Johnson, a Wisconsin Republican, told reporters.

Energy Provisions

“I’d like to think that Democrats are concerned enough with real Americans and their lives that they’d join us in those efforts,” Johnson said.

Other changes could include tax or energy provisions, he said.

Representative Paul Ryan, the lead Republican negotiator on the budget deal, said House and Senate Republicans would meet to discuss what they want to get out of the next debt limit debate.

“We don’t want nothing out of this debt limit,” Ryan of Wisconsin said in a Dec. 15 interview on the “Fox News Sunday” broadcast. “We’re going to decide what it is we can accomplish out of this debt limit fight.”

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